What is a 'Promotion'

In terms of a career, a promotion refers to the advancement of an employee's rank or position in a hierarchical structure.

In marketing, promotion refers to a different sort of advancement. A sales promotion entails the features - via advertising and/or a discounted price - of a particular product or service. Product promotions can also be classified as "sales" or "specials."

In investments, promotion refers to creating awareness to little known stocks in the hopes of increasing demand, and thus, the price of the stock.

BREAKING DOWN 'Promotion'

 

Job Promotions

A promotion is a term that is used in different contexts, the most popular being a job promotion. A job promotion is usually handed to an employee who has displayed exceptional performance or has developed the appropriate skills and knowledge necessary to take on the higher job responsibility. In the latter case, the employee may have been with the company for a required amount of time to be eligible for the promotion. For example, an individual who starts off as an analyst in an investment bank may have to do time for three years in this role, before he gets considered for the next step up, which is the associate position. A promotion is usually accompanied by a higher salary and increased job responsibilities. It might also include an expansion of benefits and managerial authority over other employees.

Product Promotions and Sales

Another area where promotion is applied frequently, is in the marketing sector. In marketing, a brand, company, product or service is usually promoted in an attempt to increase or improve the perception of the promoted asset. Product promotions are designed to increase sales of a product or service. Promotional tactics run the gamut - from coupons to "two-for" sales (buy one, get a second one free) to straight dollar markdowns or percentage discounts. Sales promotions are usually carried out through online media such as social media platforms, digital communication such as mobile SMS, print media such as newspapers, or in a physical location such as a retail store. Other ways used to promote a business or product include word of mouth, business cards, and flyers.

Stock Promotions

The capital market is not left without its own promotions. Stock promotions are carried out when an individual or a group wants to hype a stock. Unfortunately, stock promotions in the capital market are mostly a fraudulent scheme carried out by people who already own shares in their portfolio. These shares usually are priced really low and are from little known companies with no solid financial fundamentals. If the promoter’s tactics work, and more people buy the stock, the value would go up. When this happens, the stock promoter would sell or dump all his shares in the market in classic pump-and-dump style. Stock promoters use a variety of vehicles to promote the stock including advertising online, cold calling, and digital email spams.

RELATED TERMS
  1. Promotional Budget

    A promotional budget is money set aside to promote a business' ...
  2. Promotion Expense

    A promotion expense is a cost that a business incurs to make ...
  3. Marketing Mix

    The marketing mix, which focuses on product, price, placement, ...
  4. American Risk and Insurance Association

    A professional organization for academics and associates in the ...
  5. Peter Principle

    The Peter Principle is an observation that in an organizational ...
  6. Direct Marketing

    A form of advertising in which physical marketing materials are ...
Related Articles
  1. Personal Finance

    Which Home Depot Card Do You Need?

    Got a home improvement project? A Home Depot credit card can help you get supplies to tackle it – but keep in mind these downsides.
  2. Insights

    SEC Cracks Down on Paid Stock Plugs on the Web

    The SEC says paid for articles are advertisements not analyses.
  3. Insights

    Target Red Card: What You Need to Know (TGT)

    Target Corp’s Red Card is fantastically popular and a win-win for shoppers and the retailer.
  4. Personal Finance

    The Toughest Corporate Ladders To Climb

    Which careers are the hardest to be promoted in? Here are some of America's toughest corporate ladders, and some tips on how to get ahead.
  5. Investing

    Dunkin' Donuts Promotes 3, Adds 1 Executive

    Dunkin' Donuts (NASDAQ: DNKN) recently promoted three executives to vice president roles, and has brought in an industry veteran to lead its media planning, buying and placement strategies in ...
  6. Small Business

    9 Tips For Getting Free Publicity For Your Business

    Branding and publicity are extremely important for small businesses. We look at some helpful hints and tricks for entrepreneurs.
  7. Taxes

    5 Ways To Double Your Tax Refund

    Many companies offer incentives that allow you to multiply your tax refund - at a price. Here are five of the more popular promotions this year.
  8. Personal Finance

    10 Bank Promotions That Pay You To Open An Account

    Find out which banks are running cash promotions this summer.
  9. Small Business

    Business Startup Costs: It's in the Details

    Don't overlook the details when starting up a business; it's the small expenses that have the potential to make or break a great idea.
RELATED FAQS
  1. How does Twitter make money?

    Learn how Twitter earns revenue, including how the social media company uses three targeted advertising streams, data farming ... Read Answer >>
  2. What are the key differences between marketing and advertising?

    Understanding the role advertising plays in the marketing mix will help business owners define their promotional strategies ... Read Answer >>
  3. How does the Best Buy credit card work?

    Learn how a Best Buy Visa credit card can provide consumers with 5 to 6% cash back in its stores and online, and provides ... Read Answer >>
  4. How does a pump and dump scam work?

    A pump and dump scam is the illegal act of an investor or group of investors promoting a stock they hold and selling once ... Read Answer >>
  5. Who is responsible for protecting and managing shareholders' interests?

    Several parties are supposed to, including the company's employees, its executives and its board of directors. Read Answer >>
Hot Definitions
  1. Cryptocurrency

    A digital or virtual currency that uses cryptography for security. A cryptocurrency is difficult to counterfeit because of ...
  2. Financial Industry Regulatory Authority - FINRA

    A regulatory body created after the merger of the National Association of Securities Dealers and the New York Stock Exchange's ...
  3. Initial Public Offering - IPO

    The first sale of stock by a private company to the public. IPOs are often issued by companies seeking the capital to expand ...
  4. Cost of Goods Sold - COGS

    Cost of goods sold (COGS) is the direct costs attributable to the production of the goods sold in a company.
  5. Profit and Loss Statement (P&L)

    A financial statement that summarizes the revenues, costs and expenses incurred during a specified period of time, usually ...
  6. Monte Carlo Simulation

    Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot easily be predicted ...
Trading Center